Credit score-based interest rates are pivotal in determining the cost of home loans. These rates are contingent on an individual's creditworthiness, gauged by a numerical credit score. Lenders classify scores into tiers, with "Excellent" scores (750 and above) receiving the most favorable rates, and "Very Poor" scores (below 600) facing higher rates or potential loan rejections.
This interest rate disparity can significantly influence the total loan cost. Additionally, the credit score directly impacts Equated Monthly Installments (EMI), lower rates translating to more manageable monthly expenses. Moreover, the maximum loan amount one qualifies for is influenced by their credit score, potentially increasing purchasing capacity in the real estate market. In cases of co-borrowers, all applicants' credit scores are considered, with the lowest score affecting the offered interest rate.